Have you received a new contract from your employer that you’re not sure about? You might be wondering if your employer can force you to sign the new contract.
Occasionally, employers will want to alter the terms of an employee’s contract. However, before you sign the new employment contract, you should find out whether you’re required to.
In this article, we outline whether an employer can force you to sign a contract, whether an employer can alter contract terms and factors that can’t influence your decision to sign a new employment contract.
Read along!
Can your employer force you to sign a new contract?
The short answer is no. Your employer can’t force you to sign a new contract and any attempt to force you to enter into a new contract is illegal.
An employment contract must be agreed upon by both parties.
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Altering the terms of your contract
An employer can’t change the terms of your employment agreement without informing you. This is because employment agreements need to be agreed on by both the employer and employee in order to be valid. Therefore, you need to provide consent to your employer for them to make changes to your employment contract.
A unilateral change to your contract will result in a breach of contract. However, you should be aware that if you continue to work under changed employment conditions without formally agreeing to the changes, this will be interpreted as you having implicitly consented to the changes.
In the event your employer asks for your permission to alter the terms of your employment, and you give your employer permission, this alteration is legal. For example, if your employer asks you to change your duties and role in the workplace and you agree to the changes. However, it’s illegal if your employer changes or adds new terms to your contract of employment without your knowledge or consent.
Fundamental terms form the basis of an employment contract. Any alteration made to fundamental terms results in the formation of a new contract. The fundamental terms of an employment contract include:
- Remuneration (pay)
- Term of employment i.e. start and end date
- Position
- Hours of work
- Confidentiality
Example
Patricia works at a well-reputed consulting firm. A recent economic downturn has meant that less work is available. Patricia’s firm asks all senior partners to accept a 20% pay cut. However, the firm can only make this change effective if the partners agree.
Coercion
The Fair Work Act 2009 (Cth) provides you with workplace rights as an employee. Section 343 of the Fair Work Act prohibits an employer from coercing an employee into entering a new employment contract. Coercing someone means using fear, intimidation, force or threats to make someone do something against their will.
Therefore, if an employer coerces you into signing a new contract by threatening you with termination, demotion or a change to your employment status, you can make a claim to the Fair Work Commission for unlawful conduct by the employer.
Undue Influence
Section 344 of the Fair Work Act prohibits an employer from unduly influencing or pressuring an employee into entering a new agreement. It’s easier to show an employer has unduly influenced you or pressured you to sign a new contract than it is to show that you were coerced.
For an employer to have unduly influenced an employee to sign a contract, they are said to have acted in an unwarranted or excessive manner through persuasion, impel or harassment to make the employee agree to changes to the terms of their existing contract.
Both undue influence and coercion are unlawful even if the employer was unsuccessful in getting you to agree to sign a new contract.
Conclusion
Ultimately, your employer is prohibited by law from forcing you to sign a new employment contract. They’re also prevented from using unfair tactics to force you into entering the agreement.
You should be aware that changes to the fundamental terms of your agreement form a new contract. You should hire a lawyer for legal advice if you believe your employer has or is attempting to force you to sign a new employment agreement.
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